~CRA LA BUILING COMMUNITIES I of the CITY OF LOS ANGELES I ATE I MAR 3 2011 1200 West 7th Street I Suite 500 Los Angeles I California 90017-2381 I F 21 3 977 1665 www.crala.org ""'lfs CRA File No. Council istrict: ~ Contact Person: Brian Pendleton (818) 708-5850 Honorable Council of the City of Los Angeles John Ferraro Council Chamber 200 N. Spring Street Room 340, City Hall Los Angeles, CA. 90012 Attention: Sharon Gin, Office of the City Clerk COUNCIL TRANSMITTAL: Transmitted herewith, is a Board memorandum adopted by Agency Board on March 3, 2011, for City Council review and approval in accordance with the "Community Redevelopment Agency Oversight Ordinance" entitled: VARIOUS ACTIONS RELATE TO: Canby Woods. Modify Affordability Mix for Previously Approved 98 Unit Canby Woods Affordable Senior Housing Project at 7328 Canby Avenue, Reseda Earthquake isaster Assistance Project for Portions of C3). WEST VALLEY REGION (C 3) RECOMMENATION That City Council approve(s) recommendation(s) on the attached Board Memorandum. ENVIRONMENTAL REVIEW The City of Los Angeles was the CEQA lead agency for the Canby Woods Affordable Housing Project. On May 28, 2009, the City of Los Angeles, acting through its Planning epartment, approved the Project and adopted ENV 2008-4986 MN (MN). On July 16, 2009, the CRA/LA Board of Commissioners, acting as a responsible agency under CEQA, adopted a resolution certifying that it has considered the MN prepared by the City prior to acting on the Project. FISCAL IMPACT STATEMENT There is no fiscal impact to the City's General Fund, as a result of this action.
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CRA/LA Building communities cc: Sharon Gin, Office of the City Clerk (Original & 3 Copies on 3-hole punch) Lisa Johnson Smith, Office of the CAO lvania Sobalvarro, Office of the CLA Steve Ongele, Office of the Mayor Noreen Vincent, Office of the City Attorney
THE COMMUNITY REEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA MEMORANUM 10 ATE: MARCH 3, 2011 RP1080 TO: FROM: STAFF: CRA/LA BOAR OF COMMISSIONERS CHRISTINE ESSEL, CHIEF EXECUTIVE OFFICER MARGARITA H. E ESCONTRIAS, REGIONAL AMINISTRATOR BRIAN PENLETON, PROJECT MANAGER ELLEN ALERMAN COMIS, SENIOR HOUSING FINANCE OFFICER SUBJECT: Canby Woods Affordability Mix. Modify affordability mix for previously approved 98 unit Canby Woods Affordable Senior Housing Project at 7238 North Canby Avenue in the Earthquake isaster Assistance Project. WEST VALLEY REGION (C 3) LOAN APPROVE AT THE INVESTMENT COMMITTEE ON ECEMBER 29, 2010 COMMITTEE: RECOMMENATION(S) That the CRNLA Board of Commissioners, subject to City Council approval, authorize the Chief Executive Officer (CEO) or designee to: 1. Execute a First Amendment to the previously approved Loan Agreement and related documents with Thomas Safran & Associates to modify the affordability unit mix from 69 Very Low; 28 Low income units to 1 0 Very Low; 87 Low income units for the Canby Woods project located at 7238 Canby Avenue. SUMMARY In July, 2009 the CRA/LA Board approved $6,370,000 in acquisition/construction/permanent funding for the development of the 98 unit Canby Woods senior affordable housing project. However, due to the inability to obtain 9% tax credits, the developer has decided to resubmit the project for an award of 4% tax credits. Given the lower equity funding levels associated with 4% tax credit financing, the developer has returned to the CRA/LA for approval of a revised affordability mix. PREVIOUS ACTIONS July 16, 2009 the CRNLA Board approved $6,370,000 in funding for the development of the Canby Woods project. August 7, 2009 Council File 09-1793 City Council approved these actions.
MOIFY AFFORABILIT't,JliX PAGE2 ISCUSSION & BACKGROUN Thomas Safran & Associates is a Los Angeles based real estate developer. The company was formed in 197 4 to develop and manage both market rate and affordable residential and commercial properties. Residential projects have received numerous awards over the years and are situated in a variety of locations throughout southern California. The organization now owns and operates 3,200 units of affordable multi-family residential housing for both families and seniors. In 2009 approval was obtained from both the CRA/LA and City Council to fund $6,370,000 for the site acquisition and development of the 98 unit Canby Woods affordable senior project in Reseda. However, due to the inability to obtain 9% tax credits, the eveloper decided to pursue the less competitive 4% tax credit financing. Given the lower equity funding levels associated with 4% tax credit financing, the developer has requested approval of a revised affordability mix. The proposed modification will allow the project to move forward with no additional money from CRA/LA or LAH and get underway in 2011 after obtaining 4% tax credit approval (thus avoiding a competitive 9% tax credit round). Affordability Mix The following chart reflects the unit mix change that is proposed in order to achieve financial feasibility under a 4% tax credit financing scenario: INCLUSIONARY UNITS Income Original Proposed ifference Category Approval Very Low 69 10 (59) Low 28 87 59 Moderate 0 0 0 Total 97 97 0 Although the Very Low unit count will be reduced which impacts achievement of inclusionary production and proportionality requirements (see Attachment A - Affordable Housing Information for detail), a future, proposed Kittridge Family Housing project is anticipated to provide 24 Very Low units which will help to offset this loss. Four additional Very Low units are anticipated from the CRA/LA owned Reseda Theater site (developer RFP process just completed) which will have an affordable housing component. With respect to proportionality, the Kittridge and Reseda Theatre projects will not be age restricted, and no other age restricted projects are anticipated at this time. Financial Feasibility Based on the following comparison of sources and uses (below), and Attachment Sources and Uses Information Sheet, the project continues to be feasible. Under the 4% scenario, the reduced tax credit equity is offset by increased conventional loan, public sector, and deferred developer fee proceeds. The updated 15 year cash flow supports a minimum 1.15 ebt Coverage Ratio.
MOIFY AFFORABILITY 1vdX PAGE 3 Construction Sources 9% Scenario 4% Scenario Original - 6/9/2009 Current 12/9/2010 Construction Loan $18,628,175 $13,000,000 CRA/LA $6,370,000 $6,370,000 LAH $0 $1,883,600 Tax Credit Equity $0 $1,214,322 eferred eveloper Fee $590,802 $1,768,892 Total $25,588,977 $24,236,814 Permanent Sources Permanent Loan $2,904,094 $5,208,000 CRA/LA $6,370,000 $6,370,000 LAH $0 $2,347,003 Tax Credit Equity $15,724,081 $8,095,479 FHLB AHP $0 $970,000 eferred eveloper Fee $590,802 $1,246,332 Total $25,588,977 $24,236,814 Construction/ Permanent Uses Acquisition Costs $4,200,000 $4,200,000 Fees, Permits and Studies $643,465 $576,683 Architectural & Engineering $1,149,045 $1,108,107 Construction Costs $15,320,602 $14,026,669 Indirect Costs $555,982 $514,009 eveloper Fee/Costs $2,000,000 $2,000,000 Reserves and Marketing $73,500 $218,173 Financing and Legal $1,646,383 $1,593,172 Total $25,588,977 $24,236,814 ECONOMIC IMPACT A major CRA/LA objective in Council istrict 3 is the economic recovery of the downtown Reseda commercial district. It is estimated that the Project will create 139 construction jobs, 5 permanent jobs and improve the physical conditions of the Reseda commercial district helping to retain and attract new businesses as part of a larger revitalization strategy including fagade improvements, median reconstruction and beautification, alley reconstruction, redevelopment of the Reseda Theater and development of a Reseda Town Center on CRA/LA-owned property.
MOIFY AFFORABILIT),JIIX PAGE 4 SOURCE OF FUNS No new funds are needed for this action. PROGRAM AN BUGET IMPACT This action is consistent with the current adopted FY2011 Budget and Work Program related to the West Valley/Reseda Canoga Park isaster Recovery Area. There is no impact on the City's General Fund as a result of this action. ENVIRONMENTAL REVIEW The City of Los Angeles was the CEQA lead agency for the Canby Woods Affordable Housing Project. On May 28, 2009, the City of Los Angeles, acting through its Planning epartment, approved the Project and adopted ENV 2008-4986 MN (MN). On July 16, 2009, the CRA/LA Board of Commissioners, acting as a responsible agency under CEQA, adopted a resolution certifying that it has considered the MN prepared by the City prior to acting on the Project. AUTHORITY GRANTE TO CEO OR ESIGNEE If the Covenant Transfer Agreement is approved, the CRA/LA Chief Executive Officer or designee would be authorized to take such actions as may be necessary to carry out the Agreement, including, but not limited to, executing the CRA/LA Covenant Transfer Agreement and related documents. Councilman ennis P. Zine is supportive of the Project. Chris Esse! Chief Executive Officer By: ~!a~ Chief Operating Officer Real Estate and Economic evelopment There is no conflict of interest known to me which exists with regard to any CRAILA officer or employee concerning this action. ATTACHMENTS Attachment A- Site Map Attachment B- Project Term Sheet Attachment C- Affordable Housing Information r;:u f f r- Attachment - Sources and Uses 1,.; ~/ln. l'h7 oj rt Attachment E- Project Summary Report
MOIFY AFFORABILITY IVIIX PAGE 5 ATTACHMENT A SITE MAP
MOIFY AFFORABILITY 1v1IX PAGE6 ATTACHMENT 8 PROJECT TERM SHEET Project Name: Address Re ion and Pro ect Area: Borrower (Legal Entity): Canby Woods 7238 North Canby Avenue West Valle I Reseda Bixel House L.P. Thomas Safran & Associates, Inc Per Total Units Per Affordable Units Source of CRA!LA fundin Interest Rate/Term of Loan: For what is CRAILA paying: (check all applicable categories) $ 65,000 $ 65,670 Reseda/Cane a Park Low and Moderate Income Hs Funds 3_%; 55 years X Acquisition X Predevelopment!Soft Costs Relocation X Construction/Hard Costs CRAILA Lien Priority? Subordination of Housing Covenant? Other Project Funding Sources: Any special provisions/conditions precedent or subsequent? Examples: Allocation by TCAC within how many rounds; commitment from other funding sources (may include commitment of equity factor); timing of CRNLA funding; non-disturbance agreement if it is a leasehold deal; any unique, ro'ect-s ecific issue? Consistent with CRA!LA Housing Policy? No if es, re are 33334.14 findin s TCAC-9% X CLAC -4% CLAC/Bond Only (no tax credits) X LAH MHSA HC: TOO ; INFILL ; MHP_; GHI _ City of Industry X AHP Other: X Yes No (if No, brief justification for deviation):
~ ~ To Maintain Proportionality Project Name: Canby Woods (Revised 4% tax Credit) Project Address: 7238 Canby Avenue Project eveloper: Thomas Safran & Associates ATTACHMENT C AFFORABLE HOUSING INFORMATION SHEET CRA/LA Region: -:W:.ce::::s'-'-t-'V-"a'::lle::ly'-----,;::--;------- Project Area: Reseda-Canoga Park ate of Pro Forma: 12/9/2010 HC MAXIMUM RENT ANALYSIS ~. rn;a;.... I : I Extremely Low Income ($30% AMI) $331 $378 $425 $473 Very-Low Income (31%- 50% AMI)_ $551 $630 $709 $788 Low Income (51%- 80% AMI) $662 $756 $851 $945 Moderate Income (81% -120% AMI $1,213 $1,386 $1,559 $1,733 Manager's Unit $0 $0 $0 $0 Unrestricted Market Market Market Market : I... =.. $510 $851 $1,021 $1,871 $0 Market HC INCOME TARGETING Very-Low Income 9 1 Low Income 83 4 Moderate Income Manag_er's Unit 1 Unrestricted 0 TOTALS 0 92 6 0 10 10% 87 89% 1 1% 0 98 100% 30% AMI 35%AMI 40%AMI 45%AMI 50% AMI 18 2 55% AMI 60% AMI 74 3 Manager's Unit 1 Unrestricted TAX CREIT INCOME TARGETING -... TOTAL UNITS 0 92 6 0 : I 20 20% 77 79% 1% 0 98 100%
Project Name: Project Address: Project eveloper: Project Area: Canby Woods Senior Housing 7238 Canby Ave, Los Angeles, CA Thomas Safran and Associates ATTACHMENT SOURCES AN USES INFORMATION SHEET ACQUISITION & PREEVELOPMENT Acquisition & Closing Costs $2,646,000 Fees/Penmits/Studies irect Construction Costs Indirect Construction Costs Rent-up Costs Financing Costs eveloper Fee Total Acquisition/Predevelopment: $2,646,000 $0 $Per Unit: % Total Construction Cost: 0.413515099 0 $1,554,000 $4,200,000 66% $576,683 '$576,683 9% $ 1,622,116 $1,622,116 25% $ I $ I $ $0 $0 $0 $0 $3,752,799 ~6,398,799 $0 100% 0 0 0 0 0.586484901 I CONSTRUCTION Acquisition & Closing Costs $4,200,000 Fees/Permits/Studies 576,683 irect Construction Costs 1,475,951 Indirect Construction Costs 1,593,317 28,799 Rent-up Costs Financing Costs 378,850 eveloper Fee Total Construction: $6,370,000 $1,883,600 $Per Unit: % Total Construction Cost: 0.262823323 0. 077716485 I $4,200,000 17% $576,683 2% 12,550,719 $'14,026,670 58% $1,622,116 7% 218,173 $218,173 1% 1,214,322 $1,593,172 7% 231,108 1,768,892 $2,000,000 8% $0 $13,000,000 $1,214,322 $1,768,892 $0 $f!4,236,814 $0 100% 0 0.536374129 ---- -- 0.050102377 0. 072983685 --------- 0 I ---- ---- ----- --- ------- PERMANENT Acquisition & Closing Costs $4,200,000 Fees/Penmits/Studies 576,683 irect Construction Costs 1,939,354 Indirect Construction Costs 1,593,317 28,799 Rent-up Costs Financing Costs 378,850 eveloper Fee Total Permanent: $6,370,000 $2,347,003 $Per Unit: % Total Construction Cost: 0.262823323 0.096836284 $4,200,000 17% $576,683 2% 970,000 4,236,159 6,881 '157 $14,026,670 58% $1,622,116 7% 218,173 $218,173 1% 1,214,322 $1,593,172 7% 753,668 1,246,332 $2,000,000 8% $970,000 $5,208,000 $8,095,479 $1,246,332 $0 $24,236,814 $0 100% 0.040021762 0.214879728 0.334015808 0.051423095 0
CRA/LA BUILING COMMUNITIES PROJI::~T SUMMARY REPORT Total Project Size (sq ft): Residential (sq ft): Estimated Jobs Created: Construction Jobs (est.): Permanent Jobs (est.): Total evelopment Costs (TC): Maps created by CRAILA GIS Team 60,050 60,050 139 5 $24 million CRAJLA Investment $6 million CRNlA Investment% oftc: 26.28% Total Housing Units: 98 Market Rate: 0 Manager's Unit(s): Total Affordable Housing Units: 97 HC Very Low Income Units: 10 HC Low Income Units: 87 HC Moderate Income Units: 0 Undetermined Affordable Units: 0 Total evelopment Cost Per Unit $247,314 CRAJLA Investment Per Restricted Unit: $65,670 CANBY WOOS Board Item Number: Board ate: 31312011 Project Location Primary Address: 7238 North Canby Avenue, Reseda, CA 91335 Location escription: Within single family neighborhood Proposed CRA/LA Action NIA Additional Information NIA Elected Officials Council istrict 3, ennis P. Zine County Supervisor istrict 3, Zev Yaroslavsky State Senate istrict 20, Alex Padilla Congress istrict 27, Brad Sherman Assembly istrict 40, Bob Blumenfield Project escription This affordable housing project is restricted to seniors. It will include a variety of amenities, such as extensive landscaping and a pedestrian-friendly environment. Project Type Residential Construction Category: New Construction Type of Housing: Rental Housing Project Features: Affordable Housing Apartments Senior Housing eveloper I Participant(s) eveloper: Thomas Safran and Associates CRA/LA Project Staff Margarita e Escontrias, Regional Administrator Margarita e Escontrias, Regional Administrator II lldie Rodriguez, Construction Supervisor Craig Bullock, Associate Planner Ellen Alderman Comis, Sr Housing Finance Officer Brian Pendleton, Project Manager Project Activities Completed Activities: Loan Committee, 04129109 Board Authorization to Execute Agreement, 07116109 HCE Committee Approval to Execute Agreement, 07129109 City Council Approval to Execute Agreement, 08105/09 Conceptual esign rawings approval, 06101110 LEE Attainment Level, Type Silver, Formal Certification Community Benefits Adaptive Reuse Elimination of Blight Enhance Livability Enhanced Pedestrian Environment Increase Supply of Housing Stock Living Wage Jobs Prevailing Wage Jobs Strategic Plan Goals Met 1.1. 1 -Create 40,000 construction career-path jobs. o 2.1. 1 -Complete construction of at least 5,500 units of affordable housing in Redevelopment Project areas. CRA/LA Policies Applied Construction Careers & Project Stabilization Contractor I Service Worker Retention Contractor Responsibility Equal Benefits Housing Policy Living Wage o Prevailing Wage CRA/LA Policies Not Applied Not Applicable to the Project Labor Peace Agreement, Hotel projects only. Requesting Board Waiver Construction Jobs Local Hiring Program Scheduled Activities: Construction Start, 07115111 Agreement Type(s) Loan Agreement Terms of CRAILA Investment: Project I: 100261 Objective Code(s): RP1990 ata Last Updated: 12/3012010 Report Generated: 2/912011